RANCHO CUCAMONGA, Calif.-When it comes to fighting fraud in the mobile space, CUs should direct much of their attention to mobile payments.
That is the advice of Jim Hanisch, EVP of network operations and corporate development for CO-OP Financial Services, who cites two reasons for increased CU vigilance here. Hanisch believes that due to the mobile payments landscape changing quickly that fraud detection and prevention strategies will have to evolve as well.
"Also, mobile payments offer greater exposure than mobile banking," said Hanisch. "With mobile banking we are most worried about the potential disclosure of sensitive information. In the payments arena there is certainly higher risk of financial loss due to fraudulent transactions."
What will demand that financial institutions stay on their toes with mobile payments is uncertainty driven by new alternative payment players and lack of clarity about how the payments landscape will eventually play out, said Hanisch.
"In the U.S. you have the various person-to-person providers with their own methods for validation," Hanisch told Credit Union Journal. "You have a lot of conversations around near field communication (NFC) and chips placed in phones, even potentially a combination of NFC and EMV in a phone. A lot is going on here."
Hanisch advised credit unions to align with vendors of mobile soltuions that have a vision for the future and good financial strength. "It is prudent that credit unions ensure they do business with a reputable vendor that will be capable of supporting and standing behind their product. And, in terms of a product offering, does it fulfill the basics of risk mitigation and fraud protection now and in the future?"
For info: CO-OP Financial Services: www.co-opfs.org.
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